How the CEO and CMO relationship underpinned PZ Cussons’ turnaround

PZ Cussons’ CMO and CEO say their partnership has been a key foundation of the business’s transformation from a trade-led to brand building focused organisation.

At the IPA Effworks Global 2022 event today (12 October), CEO Jonathan Myers and chief marketing transformation officer Andrew Geoghegan said the “most important” reflection that came out of the transformation process was the importance of the relationship between the head of the business and its top marketer.

“Andrew needs to know he has my implicit support and everybody needs to know he has my explicit support,” said Myers.

This support has been crucial in transforming PZ Cussons, which owns brands like Carex, Imperial Leather and Original Source, from a business that had lost its focus on brands to one dedicated to building them.

During the pandemic, the business embarked on a transformation journey. Between 2013 to 2019 it had seen seven years of successive decline. Revenues had fallen from £883m in 2013 to £603m by 2019.

The first and most important thing we had to do was declare: ‘We’re in the business of building brands.’

Jonathan Myers, PZ Cussons

The business was trying to maintain profitability and looked for cost saving measures. It cut investment in marketing by a third during this period.

Myers admitted the business “became more of a trade-led company than a brand-led company” and took its eyes off the consumer.

Reorientating this focus was the priority when embarking on the turnaround, he explained: “The first and most important thing we had to do was declare: ‘We’re in the business of building brands.’”

Everyone at PZ Cussons has this mission, the CEO said.

“That’s why we call it a brand building business and not marketing-led, because everybody can put their hand up and say they’re a brand builder, whereas only the marketing teams might think themselves involved in the marketing-led strategy,” he claimed.

While the transformation of the business is a long-term process, it is already yielding results for the company. In its 2022 full year results released last month, PZ Cussons noted an improvement in like-for-like revenue momentum, up 7.1% during the fourth quarter, driven by a strong price mix. It’s also seen revenue growth up 10% over two years, Geoghegan said.

Communicating change

As top marketer at the business, Geoghegan had much of the responsibility for communicating the strategy shift to employees.

He admitted “nobody really likes change”, but added that changing mindsets in the company was a crucial first step on the transformation. Employees were encouraged to think less about brands as products to sell, but instead to see themselves “in service of building brands”.

Encouraging cross-functional cooperation was also key, as the business did not want to frame the changes as a “power struggle”, Geoghegan added.

To succeed in transforming your brand, you must also transform yourself

“We will achieve this by making harmony across all of these different businesses, rather than seeking to put one ahead of another,” Geoghegan said.

Myers added that the business took a positive message to its various stakeholders and did not dwell on the past.

“It was not a question of setting a new strategy and trashing the past. It was setting a new strategy building on the rich heritage of the company,” he said.

The messaging was repeated again and again internally to employees, as well as externally to investors and other stakeholders.

Identifying priorities

While it was important to bring all parts of the business along on the transformation journey, PZ Cussons also doubled-down on what it calls its “must-win” brands.

The company has around 30-40 brands, but Myers explained there are nine or 10 that “really make the difference”. These “must-win” brands represent 50% of sales, two-thirds of net profits and since the strategy launched have received 75% of the marketing spend, he said.

Geoghegan highlighted hand hygiene brand Carex as one of the business’s “must-win” brands. The pandemic provided an opportunity for the brand to “roll up [its] sleeves”, he said, as people focused more on hand hygiene amid Covid.

While this did provide an opportunity for Carex as the number one brand in the hand hygiene sector, the company also saw an influx of new entrants to a market that was bigger than ever before.

“We realised that it [Carex] was no longer differentiated and didn’t have the emotional connection,” said Geoghegan.

The business undertook a number of steps to tap into the opportunities that existed for the brand.

“We made choices as to where we needed to grow. We focused on getting the right consumer and shopper insight in place. We worked up a new brand positioning to leverage that insight and we focused on transforming our partnership relations,” he said.

PZ Cussons had close to 70 agency partners when it began its transformation, which has now been reduced to less than 20. This allows agencies to work “like an extension of the team,” Geoghegan explained.

We don’t need global teams. We need teams that are going to win with local consumers and against local competitors.

Jonathan Myers, PZ Cussons

The Carex packaging itself was redesigned to “retain its core look, but make it more distinctive”. The brand also launched new platform ‘Life’s a handful’.

Geoghegan said the business was “bowled over” by the results these steps yielded, even after just the first year. Twelve months in, the campaign ROI for the Life’s a handful platform was more than double compared to FMCG benchmarks. Carex also gained 2.6 percentage points value in market share and now has three times the value of its next biggest competitor.

As well as focusing on “must win brands” like Carex, PZ Cussons also sought to become more locally focused during its transformation. Myers explained the business wants to be “multilocal” rather than multinational.

During its period of difficulty, the company’s structure had shifted to operate like multinational FMCG giants such as Unilever or P&G, with marketing teams responsible for global categories. This is an approach that didn’t work for the business, the CEO said, as around 90% of sales come from just five markets.

“We don’t need global teams. We need teams that are going to win with local consumers and against local competitors,” he said.

Those teams are likely to be put to the test in the next couple of years as the economy looks set to enter into recession. Myers admitted “all of us are learning at the moment”, but added that going forward the business will stick to its mission of building brands.

“There will be bumps along the road. Our job is to be positive and composed and not panic. We will continue on the course we’re on, whilst navigating all the challenges we face,” he said.